Attempting to differentiate its merger goals in the eyes of federal regulators, Charter Communications (NASDAQ: CHTR) says it will "go further" than the FCC's recently adopted net neutrality order by not imposing data caps or any other usage-based pricing.
Charter outlined its principals for broadband conduct in an FCC filing, which sought to contrast its proposed purchases of Time Warner Cable (NYSE: TWC) and Bright House Networks from the earlier failed attempt by Comcast (NASDAQ: CMCSA) to take over TWC.
Should its $56.7 billion purchase of TWC and $10.4 billion takeover of Bright House be approved, Charter said, it would also refrain from blocking or throttling traffic. It would also eschew paid-prioritization deals.
"Building on Charter's successful pro-customer strategies (in addition to the competitive forces at work in the marketplace), we are making legally enforceable commitments to assure this Commission and our customers that this merger will deliver meaningful public interest benefits," the filing reads.
In short, Charter made the case that it would not pose a threat to the online video market because its future rests more in the broadband services that support it, rather than the pay-TV industry that competes with online video. In their review of Comcast-TWC, regulators feared Comcast would use its enhanced leverage in broadband services to thwart SVOD and OTT services.
Charter's proposed merger would create the nation's second biggest cable operator behind Comcast, serving 24 million customers in 41 states, and controlling 30 percent of broadband customers and 17 percent of pay-TV subscribers.
Speaking to the New York Times, BTIG Research analyst Richard Greenfield seems to dismiss a growing opinion among his peers that regulatory approval of the deal is a slam dunk.
"Does the government want two companies to have 70-plus percent of broadband?" Greenfield said. "That is the larger question."
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